Corinna Gilfillan of Global Witness says the change will prop up big oil’s corrupt business model
Story Transcript
KIM BROWN: Welcome to The Real News Network, in Baltimore. I’m Kim Brown. On the 14th of February this year, Donald Trump signed a law repealing fundamental checks against corruption, according to transparency advocates. Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, required that oil, gas, and mineral extraction companies, report payments made to foreign governments. But that is to be no more, as Congress eliminated section 1504 last week. According to The Hill News website, this is the first time in 16 years that the Congressional Review Act has been used to repeal a regulation. And by an odd coincidence, on February the first, the Senate confirmed Rex Tillerson as Secretary of State, on the same day the House voted to eliminate the transparency role for oil companies, that Tillerson, as CEO of ExxonMobil, had heavily lobbied against. And joining us today to discuss the implications of the repeal of Section 1504 of the Dodd-Frank Act, is Corinna Gilfillan. Corinna Gilfillan is head of the U.S. Office for Global Witness. Global Witness exposes the hidden links between demand for natural resources, corruption, armed conflicts, and environmental destruction. Corinna, thank you for being here. CORINNA GILFILLAN: Thank you for having me. KIM BROWN: So, if you would, could you please explain what precisely Section 1504 of the Dodd-Frank Act required? CORINNA GILFILLAN: Yeah, Section 1504 is an important anti-corruption provision. It requires that all oil, gas, and mining companies, that are registered in the United States through the FCC, disclose the payments that they make to governments for extraction of natural resources. So, that would include things like taxes, licenses, fees, other types of payments that they make to governments to extract oil, gas and minerals. And it’s a very important accountability mechanism, because basically, what we’re trying to do, is shine a light on the billions of dollars that these natural resource companies pay the governments, in order to make sure that people in the countries can hold their governments to account, and make sure that this money is actually going into government coffers. Rather than being siphoned off by corrupt leaders, which is what often happens. KIM BROWN: So, the Dodd-Frank Act was passed in 2010. Is this when the rule was first brought into effect, and if so, what was the result of the rule? CORINNA GILFILLAN: Well, yes. The law was passed in 2010, but in order for the law to be implemented, the Securities and Exchange Commission had to implement a regulation. And so, they actually went through two different law-making processes to come out with the regulation. And unfortunately, big oil, you know, led by companies like Exxon, really opposed the regulation, and tried at all different points, to obstruct it and kill it off. So, it took two different rule-making processes to actually issue a final regulation. That happened in the summer of 2016. So, that was a very important rule that was passed last summer. And then, unfortunately the Congress, as you mentioned, took action earlier this year to basically void the regulations. So, they didn’t kill the law, the law still stands, but they did vote to void the regulation. So, that means that it has to go back to the FCC, basically for them to do another rule-making process. KIM BROWN: So, the law that nullified this rule was sponsored by Congressman Bill Huizenga, who is a Republican from Michigan, on the 30th of January. And it was signed into law on the 14th of February. So, how was this all done so quickly, without any proper debate? CORINNA GILFILLAN: Yeah, well, that’s a very good point. As I said earlier, this regulation took years for it to come out. And then, you know, so rapidly it all went up in smoke. And so, what the Republican led Congress used, was the Congressional Review Act. That’s a law, a rarely used tool, that allows Congress to, by majority vote, in both the Senate and the House, and with limited debate, and no possibility of any filibuster, to override recently issued rules. The 1504 rule, this anti-corruption rule, came out last summer. So, it was a recently issued rule. So, we believe that the Congress really used the CRA inappropriately. And especially given the fact that this rule is backed by volumes of evidentiary records, you know, showing how important it is, and the fact that it’s undergone extensive agency review. This attack on the 1504 rule is a huge giveaway to big oil. And it really shows how much the Congress is basically giving big oil exactly what they want. And it’s important to point out that we now have Rex Tillerson, as Secretary of State. As Exxon’s CEO, Rex Tillerson did everything in his power to get this law off, because it doesn’t suit big oil’s corrupt business model. They want to do all these oil deals in secret, so that they can get as much money as they can, at the expense of people in these countries. So, you know, now Tillerson is Secretary of State, and Congress has immediately sanctioned all these corrupt deals between oil companies and despots. So, I think it’s no coincidence that all of these different things are happening at once, and so quickly. It is a big giveaway to oil interests in this country. KIM BROWN: So, this transparency rule that has been eliminated, or modified seriously by Congress, it was lobbied against quite heavily before and after it was passed, including by our new Secretary of State, Rex Tillerson, then CEO of ExxonMobil. So, why do you suppose that the oil industry cares so much about having to publish financial information that most people will never read? CORINNA GILFILLAN: Well, I think they very much want these deals to be hidden by public view. Global Witness — basically, we do research and investigations into the natural resource trade. And we’ve looked in several different countries at some of these oil deals, and what we found is that oil companies set up these questionable, or crooked deals with despotic regimes. And I can cite two specific cases. We’ve looked at ExxonMobil’s questionable dealings in Nigeria, and particularly looking at a deal agreed by Exxon and the Nigerian government in 2009, to renew three lucrative oil licenses. And what we’re finding is that the government is awarded these licenses and Exxon at a seemingly knockdown rate. And that really calls into question whether the country and the people in the country, are getting ripped off. That means far less money that’s going into government coffers that can help address poverty, or provide educational services, and other things that are desperately needed in these countries. So, what we’re seeing is, that because there’s secrecy around these deals, and the payments, that Exxon or other companies are paying to the government, that enables Exxon to get far better deals at the expense of the country, and the people in the country. Whereas, if you shed a light on these deals, if you require all these payments to come out in the open, then it’s really a deterrent to help stop these questionable deals, or at least to enable the people in the countries, or others, you know, NGOs like ourselves, to really question these deals, and to hold the government, or the officials, to account for the questionable deals that they’re setting up. So, I think that that’s why this is one of first regulations that the oil industry went after. It’s because it benefits them to have secrecy around these oil deals. And they don’t really want to shine a light on transparency. I should also say that the passage of this important anti-corruption measure, back in 2010, was a huge catalyst globally, as a result of U.S. leadership. We now have 30 countries that have similar transparency laws, which are what the U.S. passed. And as a result, many U.S. and other oil, gas, and mining companies, are already disclosing about $150 billion worth are already being disclosed in other countries. And these companies are actually doing it, and there’s no bad consequences. The sky hasn’t fallen. They’re still able to be profitable. So, I think that in the long term, it’s much better for Exxon, and other companies, to actually be transparent about their business dealings. Because I think this kind of secrecy, and partnerships with despotic regimes, can actually lead to instability. Which can be bad, not just for national security and for the citizens in these countries, but also for the companies themselves. So, I think it’s important to remember that this law is not just in the United States. Thirty other countries are actually implementing the law and companies are reporting. KIM BROWN: So, what might the results be, now that it has been repealed? CORINNA GIFILLON: Well, the actual regulation has been repealed, but the law is still alive. And so, what is going to happen is that the FCC has to now issue another regulation. That is what the Congress, basically, has done; they sent it back to the FCC. And as I said, we’re very critical of the CRA, and how it’s been used in this case. But, the FCC has to still issue a rule, and it has to meet the intent of the law that was set out by Congress. So, we are going to continue to work, and advocate with the FCC, to make sure that a rule is issued that meets the intent of the law. And companies are going to have to continue to report. They’re not going to … (audio drop) … U.S., until a new rule comes out. But they’re going to have to report globally, they’re going to have to report in Europe, they’re going to have to report in Canada and other countries. So, this is very much a global standard. I think the big oil companies are really on the wrong side of history here. I think the global trend is still towards a global transparency standard on oil, gas, and mining, revenue transparency. Unfortunately we lost this rule, but we haven’t lost the law. And I think that we’re going to see that oil companies are going to have no choice, but to have to be more transparent. KIM BROWN: Your organization, Corinna, Global Witness, and others, have campaigned very successfully against consumer purchasing “blood diamonds”. So, could we see similar campaigns against so-called conflict oil, and conflict fossil fuels? CORINNA GILFILLAN: Well, yes. And I think that the big question with big oil gutting this rule is, you know, asking the question of, “What do they have to hide?” I mentioned some of these questionable deals, whether it’s Exxon in particular, in their deal in Nigeria. We have looked at Shell operating in Nigeria, as well. So, that’s just one country as an example, but there are questionable deals that we’re looking at across the globe, and I think that consumers do need to ask the question about what U.S. oil companies really are hiding? What do they have to hide? Why don’t they want these payments to come out in the open? I also think that people in this country should be going to their senators, and asking, “Why did you vote to gut this important rule?” This is very critical information for people all across the globe to know. The natural resources rightfully belong to them, and they should know how their country is managing the resources, and the revenues that are being generated. And so, now we have a Congress that’s really voted for corruption and bribery, by gutting this important rule. So, I think that people should be asking oil companies what they have to hide, and they should also be going to their senators and their representatives, “Why was this rule gutted, and what are you going to do to bring back transparency?” ‘Cause I think that that’s very important for accountability, and making sure that natural resource revenues actually benefit people in the countries, and don’t fuel corruption and instability. KIM BROWN: We’ve been speaking with Corinna Gilfillan. She’s the head of the U.S. Office for Global Witness. Global Witness exposes the hidden links between the demand for natural resources, corruption, armed conflict, and environmental destruction. And we’ve been talking about the repeal of Section 1504 of the Dodd-Frank Act, which allows oil, gas, and mineral extraction companies, not to disclose payments from foreign governments. So, Corinna we appreciate your time and your expertise on this topic. Thank you. CORINNA GILFILLAN: Thank you very much. KIM BROWN: And thank you for watching The Real News Network. ————————- END
Republish our articles for free, online or in print, under a Creative Commons license.
